Correlation Between Wulff Yhtiot and Biohit Oyj
Can any of the company-specific risk be diversified away by investing in both Wulff Yhtiot and Biohit Oyj at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Wulff Yhtiot and Biohit Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wulff Yhtiot Oy and Biohit Oyj B, you can compare the effects of market volatilities on Wulff Yhtiot and Biohit Oyj and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Wulff Yhtiot with a short position of Biohit Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wulff Yhtiot and Biohit Oyj.
Diversification Opportunities for Wulff Yhtiot and Biohit Oyj
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wulff and Biohit is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Wulff Yhtiot Oy and Biohit Oyj B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biohit Oyj B and Wulff Yhtiot is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Wulff Yhtiot Oy are associated (or correlated) with Biohit Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biohit Oyj B has no effect on the direction of Wulff Yhtiot i.e., Wulff Yhtiot and Biohit Oyj go up and down completely randomly.
Pair Corralation between Wulff Yhtiot and Biohit Oyj
Assuming the 90 days trading horizon Wulff Yhtiot Oy is expected to under-perform the Biohit Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Wulff Yhtiot Oy is 2.07 times less risky than Biohit Oyj. The stock trades about -0.02 of its potential returns per unit of risk. The Biohit Oyj B is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 291.00 in Biohit Oyj B on November 28, 2024 and sell it today you would earn a total of 4.00 from holding Biohit Oyj B or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wulff Yhtiot Oy vs. Biohit Oyj B
Performance |
| Timeline |
| Wulff Yhtiot Oy |
| Biohit Oyj B |
Wulff Yhtiot and Biohit Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wulff Yhtiot and Biohit Oyj
The main advantage of trading using opposite Wulff Yhtiot and Biohit Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wulff Yhtiot position performs unexpectedly, Biohit Oyj can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Biohit Oyj will offset losses from the drop in Biohit Oyj's long position.| Wulff Yhtiot vs. Tecnotree Oyj | Wulff Yhtiot vs. Digitalist Group Oyj | Wulff Yhtiot vs. Aspo Oyj | Wulff Yhtiot vs. Finnair Oyj |
| Biohit Oyj vs. Bittium Oyj | Biohit Oyj vs. Dovre Group Plc | Biohit Oyj vs. Afarak Group Oyj | Biohit Oyj vs. Tecnotree Oyj |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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